Strong demand in January pushes Bay Area home prices up

Heavy bidding for Bay Area single family homes kept January prices well above their levels of a year ago, a report Thursday showed, stirring hopes that the recovery is well under way.

The median price for a single family home in the nine-county Bay Area was $435,000, up 24.3 percent from the previous January, according to DataQuick, a real estate information company.

The biggest gainer was Alameda County, where the median price of $420,000 was 29.2 percent higher than a year earlier.

Santa Clara County was up 29.1 percent from a year ago with a median sales price of $605,000; San Mateo gained 21.3 percent to a median price of $640,000 and Contra Costa County increased 20.2 percent to a median price of $294,500.

Sales dropped in Santa Clara County from a year earlier, while they rose modestly in Alameda, Contra Costa and San Mateo counties, DataQuick reported.

The housing market usually slows in January, but buyers were still plentiful while sellers remained on the sidelines. That resulted in multiple offers for many homes, with investors paying cash often making the winning bids.

"We are in dire need of more homes to sell," said Cameron Platt of Harcourts Platt Real Estate in Oakland. "First-time buyers can get very discouraged."

Even million dollar homes are drawing multiple offers, some of them all cash.

A house in West San Jose on the market for just over $1 million drew 14 offers and sold for $72,000 over the asking price. One lower priced condo in Concord drew 28 offers, selling for $80,000 over list price.

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"There are definitely more buyers than properties," said Michele Manzone, president of the West Contra Costa Association of Realtors. "More are coming on the market every day, but there's still not enough inventory for the amount of buyers out there."

Absentee buyers -- typically investors -- played a big part in the Contra Costa County market, accounting for 30 percent of sales of all types of homes, DataQuick said. They made about one-quarter of all home purchases in Alameda County, and about one-fifth of all purchases in San Mateo and Santa Clara counties.

The hope is that the price revival will encourage more homeowners to sell in the spring. There are already signs of that, said Carl San Miguel, president of the Santa Clara County Association of Realtors.

The January drop in sales "is just because we had less inventory," he said. Now, with more than 900 homes for sale in Santa Clara County, "it seems like it's starting to pick up. As each month progresses, I think the activity will."

Realizing that interest rates aren't going to stay low forever, "everybody's feeling the pressure to jump in," said Robin Dickson, president of the Contra Costa Association of Realtors.

"But sellers are having a challenge," she added. "The market has improved but not enough so that the move-up buyers have sufficient equity to make the next jump. Although they might not be upside-down, they don't have the ability to make that leap."

And it's still tough to qualify for a loan, Dickson added.

The market mix has also shifted in the past few quarters from low-priced foreclosures and short sales to higher-priced homes. That has the effect of sending the median price higher.

The number of all types of homes sold for under $500,000 fell almost 18 percent from the previous January across the Bay Area, while homes sold for more than that increased 45.4 percent.

In Santa Clara County, sales for less than $300,000 were down by 49 percent, while sales over $800,000 rose by 38.6 percent from a year ago.

Contra Costa County saw a drop of 25 percent in sales for $300,000 or less, while sales of homes priced for $300,000 to $800,000 were up nearly 39 percent.